The federal government’s budget last month, and the accompanying Jobs Report, has been the target of much criticism of late. Some of that may be well founded in attacking the reliability of sources used by the Department of Finance in calculating the job vacancy rates on a national level. However, it would be equally faulty to suggest that if the vacancy rate trotted out by the Department of Finance is flawed, then the skills gap in this country must also be a fairy tale.

Taking a closer look at key insights behind Canada’s labour market reveals a complex situation. There are important factors driving long-term labour market trends that have been masked by the 2009 recession.

Canada’s population is aging, and many skilled workers will be leaving the workforce. According to Hays PLC, Canada’s population of workers under age 35 is 18 per cent compare to the global average of 33 per cent. Statistics Canada, along with several other government departments and demographic forecasters predict that all growth in Canada’s workforce over the next decade will come about from immigration.

The world of work is changing. Modern economies are rapidly changing, demanding new skills for the new economy. Canada will be competing with other countries for those same skills on a global basis.

Citing several foreign government sources as well as Statistics Canada, the federal government found that since 2006, job creation in Canada has outperformed those of other G7 countries, almost two per cent more than Germany. There are one million more Canadians working today than in 2009.

High-wage industries accounted for 71 per cent of that job growth, according to Statistics Canada, and 87 per cent of those jobs were full time.

Looking at levels of unemployment, it’s true that our national rate is stuck around seven per cent, with some cities, such as Windsor, as high as 8.5 per cent. But a closer look at the numbers tells a different story, underscoring the shift that is taking place in the economy. According to a report from the OECD in 2013, the unemployment rate among high-skilled workers with a bachelor’s degree and higher is 5.4 per cent, which indicates little if any elasticity in the market. For medium-skilled workers, those with a high school diploma, the unemployment rate is 6.3 per cent and for low-skilled workers without a high school diploma, the rate jumps to 13.8 per cent.

Canada is experiencing a severe shortage of skilled workers in many regions and in many industries. That is what this discussion needs to be about.

Reality is that Canada is not producing the skills that are in high demand for jobs today and many of those jobs are going unfilled. According to a C.D. Howe report published in 2013, the professional, scientific and technical services sector, which tends to pay above-average wages, quietly hit its highest job level on record in December 2013. The sector led the country’s job growth last year, with an increase of 85,500, or seven per cent of the workforce. One key reason jobs are going unfilled is that skilled Canadians are not willing or able to relocate to fill openings.

In research conducted by the Canadian Employee Relocation Council in partnership with Ipsos Public Research, we found that a mere 20 per cent of Canadians would be willing to relocate to another city in Canada for employment.

The Temporary Foreign Worker Program helped to alleviate some of that pressure. For example, under this program in 2012, some 75,000 workers in management, professional and skilled-worker occupations entered Canada, filling critical roles in the economy. The federal government placed significant restrictions on the use of that program in the summer of 2013.

Based on a recent members’ poll, by the Canadian Employee Relocation Council, we have evidence to suggest businesses are already feeling the impact of restrictions the government imposed on employers looking to recruit workers from overseas in 2013.

Study Highlights:

Over a third reported lost business since the changes were introduced.

Almost one third have had to move work outside Canada.

The majority face high costs and long delays in the completion of critical contracts.

To address this situation, it is time for meaningful dialogue about Canada’s skills gap and the role labour mobility can play. Steps the government could take include:

reinstituting an expedited approval system for recruiting skilled foreign workers;

upgrading Canadian tax policies to provide more supports for workers and their families to move from areas with higher rates of unemployment to areas where job opportunities exist and;

expanding current tax rules for temporary living expenses for employees that are commuting long distances for employment.

Stephen Cryne is president & CEO of the Canadian Employee Relocation Council, a not-for-profit organization dedicated to removing barriers that restrict mobility and deployment of human capital.

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